DETERMINANTS OF CHANGES DIVIDEND BEHAVIOR POLICY: EVIDENCE FROM THE AMMAN STOCK EXCHANGE

The motivation for these studies is the international extensive researches about factors that might be important in determining firms dividend policy. There are many reasons explaining why dividend policy is so interesting. One reason is that the dividend policy of the firm affects its capital structure, since the retained earnings intent to fund the firm. Otherwise, the firm has to raise funds by issuing new debt. The behavior of dividend policy is the most debate able issue in the corporate finance literature and still keeps its prominent place both in developed and emerging markets. Dividend policy is one of the most intriguing topics in financial research. Even now, economists provide considerable attention and thought to solving the dividend puzzle, resulting in a large number of conflicting hypotheses, theories and explanations. This paper aims to determine the dividend policies of the 60 industrial firms listed on the Amman stock exchanges (ASE) for the period of 2005-2009, and to explain their dividend payment behavior. This study used the tobit regression analysis, and logit regression analysis, and hence the random effects tobit/logit models are favorable than the pooled models. The paper finds that the dividend policy in Jordan as a developing country is influenced by factors similar to those relating to developed countries.